BPS’s ownership reorganisation plan to continue, acquisition in 2012 done via tender

PETALING JAYA (June 13): The shareholders and management of Battersea Power Station (BPS) will continue the reorganisation of ownership for BPS phase 2 as it will bring long-term investment yield to all stakeholders, said BPS developers Sime Darby Property Bhd and S P Setia Group Bhd in a joint statement today. The developers opined that the potential reorganisation of ownership of commercial assets in BPS is a strategic move to enable the developers to reallocate capital for other developments.

The developers said the main shareholders of BPS — Permodalan Nasional Bhd (PNB) and Employees Provident Fund (EPF) — viewed the reorganisation of ownership as a “strategic opportunity to secure ownership of a unique and iconic real estate asset which will be able to deliver sustainable income streams into the future to meet their income needs”.

“As announced on May 15, 2018, the exclusivity period for the transaction has been extended to June 29, 2018. The parties are continuing to work positively and constructively together toward completing the proposed transaction and a further announcement will be made in due course,” said the developers.

On Jan 18, PNB and the EPF has signed a Heads of Terms with Battersea Phase 2 Holding Company Ltd, a Battersea Project Holding Company Ltd in which S P Setia and Sime Darby Property own a 40% stake each, to initiate preliminary negotiations to purchase the commercial assets for an estimated total consideration of £1.608 billion (close to RM8.6 billion).

The developers also noted that the purchase price of the commercial assets, which include office, retail, F&B and others, are subject to further due diligence and on the basis that the development is completed and fully tenanted.

The developers also stressed that the BPS was acquired by Sime Darby Property, SP Setia and the EPF through “a competitive tender process” in September 2012.

PKR de facto leader Datuk Seri Anwar Ibrahim had revealed on Monday that the new government will be investigating the previous government’s investments in the UK, including the BPS.

“The site acquisition and the subsequent costs of the development have been fully funded by a combination of equity from the shareholders with development debt provided on commercial terms by a mixed group of nine Malaysian and international lenders,” the developers said.

They noted that the £458 million development loan for phase 1 has been fully repaid ahead of schedule. The initial capital invested into the project by the developers and the profit from the first phase is now being reinvested into developing the subsequent phases.

Work on the BPS building is on track and is scheduled to open to the public in late 2020. It is expected to attract a crowd of 40 million annually, the developers added.

To recap, a total of 500,000 sq ft office space has been pre-let to Apple inc, one of the world’s leading technology companies. This also represents one of London’s largest ever office pre-lets.

In addition, BPS will house 120 shops and restaurants, event space and visitor attractions, creating a new town centre for London. There will also be 253 residential apartments (currently 90% sold).